Meta Weighs a $20B-Plus Dollar and Euro Bond Sale as Investors Demand More to Fund AI
The debut euro deal comes days after S&P moved Meta's outlook to negative, with Alphabet and Oracle also tapping debt markets as AI borrowing costs rise.
Meta Platforms (META) is preparing a bond sale of at least $20 billion in U.S. dollars and euros, according to a published report citing a person familiar with the plans. The deal would be its first major bond offering since a $25 billion sale in April and its debut in the euro market, and the proceeds would help fund AI infrastructure. Citigroup and Morgan Stanley are holding investor calls on Nov. 2 and 3. The size, terms and timing are not confirmed.
The proposed offering
| Item | Detail |
|---|---|
| Dollar bonds | Five tranches, maturing in about 5 to 30 years |
| Euro bonds | Six tranches, spanning roughly 4 to 38 years; Meta's first euro offering |
| Size | At least $20 billion in total, not confirmed |
| Banks | Citigroup and Morgan Stanley, with investor calls Nov. 2 and 3 |
| Last bond sale | $25 billion in April, which the report says drew about $96 billion of peak demand |
By our calculation, the April deal was about 3.8 times covered at its peak. Credit appetite for technology debt has weakened since then amid concerns about returns on AI spending and higher costs of default protection, according to the report, so investors are likely to ask for more yield than they did in April.
A credit warning days earlier
On Friday, S&P Global Ratings moved Meta's outlook to negative while keeping its AA- rating, saying the company has fewer ways than its rivals to make money from AI. Meta has about $825 billion in commitments, mostly for AI infrastructure, according to published reports. The company is leaning on both debt and equity, which makes the pricing of this bond sale an early test of how the market weighs the strain.
The equity side
| Piece | Detail |
|---|---|
| Common stock | $25 billion priced Oct. 27: 40 million Class A shares at $625, upsized from $22.5 billion, sold through forward sale agreements; reported demand of about five times the shares offered |
| Mandatory convertible preferred | $12.5 billion of 6.50% depositary shares at $50 each, converting into common stock around August 2029 |
| At-the-market program | Up to about $60 billion proposed, with a launch expected as early as the first quarter of 2027, subject to finalization |
By our calculation, the base equity deals total $37.5 billion, and adding the proposed $60 billion program brings potential equity funding to about $97.5 billion. With at least $20 billion in new bonds, Meta's fundraising in a few weeks would exceed $117 billion if everything is completed. The stock closed at $620.08 on Oct. 27, below the $625 offering price. Goldman Sachs estimates Meta's capital spending at about $230 billion in 2027 and $250 billion in 2028, with a free cash flow outflow of about $33.5 billion in 2027, according to published reports.
Peers are borrowing too
Alphabet launched a €6 billion ($6.7 billion) seven-part euro bond sale on Nov. 2, with maturities from 2 to 19 years, and demand of just over €17 billion, about 2.8 times the offering by our calculation. Its shares fell nearly 19% in October, according to published reports. Oracle is also reported to be seeking new debt to finance AI expansion. Analysts expect more large technology issuers to tap the European market.
What to watch
- Pricing and demand. The spread over Treasuries and the order book for each tranche, compared with April's deal, will show how much extra investors are demanding.
- Final size. Whether Meta raises more than $20 billion and how it splits between dollars and euros.
- Ratings. Whether S&P's negative outlook is followed by other agencies, and how it affects borrowing costs.
- The at-the-market program. Any filing that finalizes the roughly $60 billion proposal, which would add dilution on top of the bond sale.
- Sector read-through. Funding strains across AI infrastructure are visible in smaller names too. See our coverage of the Anthropic S-1 amendment, IREN and XMax.
Sources: The bond plans come from a published report citing a person familiar with the matter. Equity offering details, ratings action and peer deals come from published reports and company announcements; terms and prices will change. Items labeled by our calculation are our own arithmetic. This article is informational only and is not investment advice.
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